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SITUATIONAL OVERVIEW
Wireless technologies come in waves. Generations of technologies address the insatiable and evolving
demand for wireless services. Within every generation a number of competing standards vie for
prominence. The stakes are high – ranging in the hundreds of billions of dollars.
Developing a wireless standard is a process of negotiation between ecosystem participants. Despite the
lengthy process and large effort required to develop a standard, a larger effort is required to develop
robust, stable, efficient and cost effective equipment. Commercial deployments follow equipment
availability, technology trials and product trials. But herein lays the greatest challenge for wireless
ecosystem participants: How to predict the potential market share of each wireless standard?
Market share of a wireless standard is critical: standards are created to enable mass markets, and by
inference, a standard that fails to garner mass adoption is perhaps worse than a proprietary one as a
proprietary ‘standard’ is an optimized and efficient solution for a particular usage scenario.
Market share has critical implications for the entire supply chain from silicon and component vendors to
equipment vendors, wireless operators, and finally, even to wireless subscribers. The technology bets
placed by each part of the supply chain have very large impact on profitability and even the survivability
of players in the wireless infrastructure business. Hence, component and silicon vendors have to justify
expenditures that can range on the order of tens of millions of dollars to develop, for example, a single
baseband modem, while equipment vendor expenditures would range in the hundreds of millions of
dollars, if not more, to develop equipment for an access network. Network operator investment can
start in the hundreds of millions and end up in the billions of dollars for large national operators.
With services needing to be priced at the order of tens of dollars (or a few dollars in emerging markets),
market share, is terms of subscriber count, is the only remedy to recoup invested capital. The failure of a
wireless standard from gaining momentum in terms of market share has significant impact throughput
the supply chain. Hence, different parties in the ecosystem develop strategies to mitigate their
exposure. A common strategy is to invest in multiple wireless standards which is akin to purchasing call
options on wireless standards. This strategy, ‘investment duplication’, is particularly common among
large equipment vendors who develop equipment for multiple standards.
However, for wireless network operators, the ‘investment duplication’ strategy is generally not
available, or in any case, is extremely costly. Yet the perils of a failed binary technology decision are all
too evident: low revenues, profitability and valuation.
TECHNOLOGY OPTIONS
In the wireless space, fourth generation systems like LTE and WiMAX are beckoning. Today, the battle
between WiMAX and LTE has mostly been settled on the major front – that of mobile services - in favor
of LTE, even though LTE is yet to see mass deployments. As part of the 3GPP standard roadmap adopted
by major wireless operators, LTE had a distinct advantage over WiMAX, which was enhanced by where
network operators were in terms of investment and business cycle with 3G systems. As subscriber rates
Nevertheless, several WiMAX ‘pockets of resistance’ remain: fixed applications in emerging markets,
rural markets in developed countries, niche applications in vertical markets such as electric smart grids,
and in worldwide geographies in frequency bands above those used currently for mobile systems (e.g.
2.5 – 2.7 GHz and 3.x GHz bands) as shown in Table 1. In these applications, WiMAX has almost
universally been used for fixed and portable access (indoor/outdoor modems, USB dongles) rather than
mobile access (personal handsets).
Currently: GSM/3G
Leading Technology WiMAX
Future: LTE
The advent of LTE and its aggressive promotion as substitute to WiMAX can be unsettling for Greenfield
wireless network operators on the verge of selecting a technology as well as for established WiMAX
operators looking for long term profitability, which as explained, is inextricably linked to the health of
WiMAX the ecosystem. This point has been amply demonstrated by Qualcomm winning spectrum
licenses in India’s BWA auction with the resolve to roll out TD-LTE.
This is a critical juncture in time when there is no apparent winner and no sure standard for services
outside of mobile broadband. For operators of fixed broadband wireless networks (FBW), technology
strategy – selection or migration – becomes a critical part of the corporate strategy with great
consequences and ramifications. Yet, the wireless industry has been at similar junctures in the past: the
battle between GSM and CDMA in the mid 1990’s, the evolution path from 2G to 3G which included
Edge as a possible interim standard, and most recently the cannibalization of Fixed WiMAX standard
based on 802.16-2004 in favor of Mobile WiMAX based on 802.16e-2005. Much can be gained from
these past conflicts to guide a path for technology selection and migration.
LTE differentiates from 3G standards by shifting key layer 2 and 3 functions from the core network to
the base station. The LTE MAC performs scheduling and Hybrid ARQ functions. The Radio Link Control
(RLC) Layer performs concatenation and segmentation. The Packet Data Convergence Protocol (PDCP)
Layer performs header compression and encryption. The Radio Resource Control (RRC) Layer is a control
plane function that services lower layers. The LTE network architecture, commonly called the Enhanced
Packet System (EPS) is shown in Figure 1.
The WiMAX MAC layer is rather sophisticated and combines the equivalent functionality of the LTE MAC,
RLC, PDCP, and RRC. The WiMAX network architecture is shown in Figure 2.
1
China Mobile has made public its interest and intent to deploy TD-LTE.
S1-MME
MME PCRF
Gx Rx
S11
R1 R6 ASN R3c
MS BS AAA
Gateway
R3c
Operator’s
R8 R4 IP Services
R3b
ASN
MS BS HA
R1 R6 Gateway R3b
COMPARATIVE ANALYSIS
Table 2 provides a comparative overview of key features in LTE and WiMAX. It shows that both
technologies are well equipped with the latest innovations to provide high data and robust link in mobile
fading channels. Both are based on flat IP network architecture and support different Quality of Service
Table 3 shows the downlink throughput for WiMAX and LTE which are equivalent. The results are for
single antenna and can be scaled in case of spatial multiplexing by 2 or 4 for 2x2 or 4x4 antennas,
respectively (spatial multiplexing theoretical capacity increase is linear with Min(NTx, NRx), the number of
transmit and receive antennas). Because LTE is FDD and WiMAX is TDD, a fair comparison would be
between 5 MHz LTE and 10 MHz WiMAX. LTE throughput factors overhead for PDCCH, PBCH, reference
and synchronization signals while that for WiMAX factors in layer 2 overhead associated with preamble
and downlink MAP (6 overhead symbols). The WiMAX downlink sub-frame was for a total of 26 symbols,
equivalent to a 55:45 traffic ratio.
In terms of system gain, both WiMAX and LTE provide equivalent values as similar access technique
(OFDM), modulation grades, coding (CTC), multiple antenna systems (space time/frequency coding;
spatial multiplexing), and other features like Hybrid ARQ are used. This results in equivalent cell radius
and subsequently cell count for a given market.
In summary, the two technologies would provide equivalent performance. Indeed, the battle between
the two standards has not been focused on performance (as the battle between GSM and CDMA was
centered mainly on capacity), but rather on the ubiquity of adoption, and henceforth, on the health of
the ecosystem, sustainability and profitability.
In contrast to LTE, WiMAX has been focused on deployments in higher frequencies, namely 2.3 GHz
(Korea, India), 2.5-2.7 GHz (USA), and 3.4-3.6 GHz (Europe, rest of the world). Depending on geography,
these bands feature unpaired (TDD) or paired allocations. The WiMAX Forum, the industry coalition
behind WiMAX, certified equipment for compliance with the IEEE standard and for interoperability in
these bands.
Meanwhile the frequency bands for TD-LTE which is being promoted as a substitute to WiMAX have
focused on 2.3 GHz and 2.5 GHz, driven by interest of China Mobile and Indian broadband deployments
and by US operator Clearwire, respectively. This leaves WiMAX relatively little challenged in the 3.x GHz
bands for the time being.
The fragmentation of spectrum presents a challenge for equipment vendors as wireless devices (and
base stations) need to support a continually higher number of frequency bands. It is particularly in the
RF chain that includes RFICs, filters, mixers and power and low-noise amplifiers that this challenge
becomes manifest. Even as component vendors strive to develop multi-band RFICs, supporting wide-
band or dual-band power amplifiers is very challenging.
Multiple antenna systems add another complication by allowing different options such as 2x2, 2x4, and
4x4 systems2 on the base station and another, but smaller set of options on the subscriber device (which
are typically 1x2, but some have proposed higher order configurations).
Aside from complications resulting from the availability of different frequency bands on equipment
design choices, spectrum fragmentation tends to slow down the certification process and can lead to a
slower adoption of a standard. In the case of WiMAX, the focus was placed on the ‘flagship’ 2.5 GHz
profile followed by 3.5 GHz and 2.3 GHz system profiles.
2
This nomenclature indicates the number of transmit and receive antennas on the same equipment. While typical
GSM and 3G systems are 1x2 – one transmit and two receive antenna systems – LTE is envisioned to be rolled out
in a 2x2 configuration at the very least just as WiMAX has rolled out with 2x2 support being a standard feature.
Consumer devices
Base stations
Gateways
Core Network Elements (e.g. AAA/HSS)
Backhaul systems
Routers, switches, VoIP softswitches, and session border controllers
Management systems
Migration from one technology to another requires a strategy for each of the above items.
Base Stations: Base station architecture includes the logical modules shown in Figure 3. These module
can all be combined into a single mechanical unit (as is the case in zero-foot print, all-outdoor base
stations), or split indoor-outdoor architecture in which the radio is typically placed remote from the
indoor baseband unit and close to the antenna.
Migration of the base station between technologies is a possible but intricate proposition that many
vendors claim, but few support in totality. To consider the ability to migrate a WiMAX base station to
LTE, each module needs to be considered separately, as well as the combined solution.
To Core
Transport Baseband Radio
Network
Control &
Power
Synchronization
Since both WiMAX and LTE are based on the same physical layer technology, a radio could support both
WiMAX and LTE. The radio design, with required linearization techniques, crest factor reduction and/or
amplifier power backoff to accommodate technical characteristics of OFDMA, as for example the peak-
to-average power ratio, is similar. As the radio unit accounts for about 40% of the base station cost, the
ability to migrate a radio between technologies saves the operator a large part of the base station
expense.
The baseband module could in theory be upgraded through a firmware upgrade if the unit uses
programmable devices such as FPGAs, DSPs, and NPUs (baseband module based on technology specific
system on chip – SoC – is not firmware upgradeable to another technology). However, this may not
necessarily be a straight forward process. The same applies to firmware of the transport module which
includes higher layer protocol stack to interface with the core network. Finally, the synchronization
module is critical and many base station designs fail to upgrade between technologies as internal
clocking and synchronization requirements between WiMAX and LTE are different.
Gateways: The WiMAX ASN Gateway is a major network element that acts as the conduit for any user
traffic and control plane signaling between the base and subscriber stations and core network elements.
The LTE Serving and Packet Data Network Gateways have similar functions. Both technologies have
implemented open interfaces to facilitate inter-vendor interoperability. Moreover, different vendors
support different architectures as, for example, separating the data and control planes, or keeping them
on one hardware unit. Selecting the proper architecture, product and vendor is an important aspect in
migration of the gateways from WiMAX to LTE. Fortunately, as the traffic load of WiMAX and LTE base
stations is expected to be similar, both technologies would require similar provisioning of resources at
the gateway.
Core Network Elements: These elements are typically provided by third party vendors who support the
required primitives for a technology and conduct interoperability tests with core network element
vendors and RAN equipment vendors (base stations and consumer devices).
Backhaul Systems: These systems would be the same for WiMAX and LTE since base stations for both
technologies are expected to support the same number of users and subscriber throughput. A design for
WiMAX should require the same backhaul capabilities as that for LTE provided that all air-interface
parameter are the equivalent (e.g. channel bandwidth, number of antennas).
Management Systems: OSS/BSS systems are another critical part of the network. Network and element
management are captured under OSS with responsibility for provisioning, configuration, fault,
performance management. Billing and customer care solutions are captured under BSS. Although
WiMAX and LTE are similar, these systems need to integrate with other network elements such as the
access or packet data network gateways and the AAA/HSS servers. Interoperability testing is required to
ensure that the installed system supporting the WiMAX network can support the LTE network in an
error-free manner. The strategy for OSS/BSS migration needs to take a holistic account of what options
the WiMAX network uses. For example, WiMAX device provisioning can be through TR069 which has
been implemented in fixed networks and leverages extension of the DSL network, or through OMA/DM
which is widely deployed in mobility systems. Migration to LTE can therefore be more involved a
complete strategy for upgrading the management systems is required.
Finally, switches, IP routers and other network elements such as VoIP softswitches and session border
controllers need to be tested for interoperability, even though they interface with the wireless network
at higher layers of the network protocol stack.
As a rule of thumb, the further an element is removed from the air interface, the higher likelihood that
no hardware change is required so that functional interoperability is what is required for migration
purposes.
Migration from WiMAX to LTE, as that between any two technologies, involves repeating processes
already performed for the incumbent network such as RAN planning, design and optimization. Managing
these processes requires careful planning to ensure successful execution of the migration strategy. The
following factors need to be to consider including:
1- Acquisition of additional spectrum: Wireless network operators with small spectrum allocation
would find a challenge in running two wireless networks simultaneously in the same spectrum.
Although both WiMAX and LTE feature fractional frequency reuse (FFR) which reduces the
spectrum requirements, FFR may not be supported by the equipment vendors. Additional
spectrum may be required.
2- Frequency planning: The migration plan must include detailed frequency plans and transition
timelines.
4- Subscriber devices: swapping subscriber devices is an important issue along with provisioning
and configuring the new devices.
The operational process of migration between WiMAX and LTE requires careful thought and planning: it
is a most critical aspect of network migration. Wireless network operators need to work the details of
the migration process with their equipment vendors to ensure uninterrupted service.
Financial and commercial considerations are key elements to justify the migration decision. Migration
needs to be considered in the context of improving competitiveness by providing greater service, better
performance and lower cost. This enhances the operator bottom line by increasing revenues and
A financial model is an important tool to identify and monetize the different parts of the migration plan
to estimate their value to the network operator. The plan would reflect the required capital acquisitions
and operational expenses such as additional equipment, spectrum, human resources, interoperability
testing, equipment/network acceptance testing, planning, design and optimization among other
expenses.
The financial model allows the network operator to explore and compare different migration strategies
including the timing of investments. A proper understanding of the technology and commercial
landscape is essential to build an appropriate model and account for proper inputs.
CONCLUSIONS
Migration of wireless networks from one technology to another is a challenging task that should be
undertaken with full considerations of the overall vision and market strategy for the network operator.
WiMAX and LTE technologies offer similar technical performance and the battle between them
transcend technical aspects into the realm of ecosystem viability, cost and variety of consumer devices,
service competitiveness, and ultimately, profitability for the network operator which drives valuation.
Technology migration is a complex process that must be planned carefully. Different elements of the
wireless network must be considered and a plan to migrate each element must be defined that includes
specific steps and timelines. The support of the vendor community is essential and careful consideration
of vendor promises must be weighed. A financial model that captures all the elements of the migration
plan serves as a tool to validate the need for migration as well as to evaluate and benchmark different
migration options to establish the best strategy for a particular operator.
18 Byer Drive
Markham, ON L3P 6V9
Canada
+1.416.969.9570
Inquiries
Frank Rayal, CTO
info@tsiwireless.com
TSI services entities across the wireless network supply chain: equipment vendors,
system integrators and network operators. TSI services are provided by a team of
telecommunication industry professionals with expertise in managing large-scale
wireless network buildout, optimization and expansion; product development, design and
marketing; financial analysis and market research; and business development. TSI staff
has contributed to the successful launch of several wireless networks on a worldwide
scale including networks in Canada, the United States, Europe, the Middle East and
Latin America.
Copyright ©2010 Telesystem Innovations Inc. All Rights Reserved. Information in this
document is subject to change without notice. Telesystem Innovations assumes no
responsibility for any errors that may appear in this document.
TSI 100623-006